Competitive Intelligence: Is it Ethical?

Competitive intelligence (CI) is very important in the fast-paced world of business. According to the Entrepreneur website, CI essentially means “understanding and learning what’s happening in the world outside your business so you can be as competitive as possible. It means learning as much as possible-as soon as possible-about your industry in general, your competitors, or even your county’s particular zoning rules. In short, it empowers you to anticipate and face challenges head on”.

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Key points of this definition, as pointed out by Stephen Haag, author of Management Information Systems for the Information Age:

  1. Competitive intelligence is an ethical and legal business practice, as opposed to industrial espionage, which is illegal.
  2. The focus is on the external business environment.
  3. There is a process involved in gathering information, converting it into intelligence and then utilizing this in business decision making. Some CI professionals erroneously emphasize that if the intelligence gathered is not usable, or actionable, then it is not intelligence.

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Ethics does come into play since there is a fine line between using the intelligence you have gleaned illegally or not-so legally. Using information that was gathered legally through many sources, like Spyfu, SEMRush, Ispionage and KeywordSpy are considered legal, since it is public knowledge you are researching and getting analytics about. Illegal information gathering and usage includes exploitation and exposure of trade secrets.

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Take the case of the five HTC employees who used competitive intelligence to learn how to better use their technology to meet the needs of their clients. They used external information to create a new product to gain a better share of the saturated and highly competitive smart phone market for HTC. Little did HTC know that these five employees planned on taking this intelligence, along with trade secrets to “start their own design firm, and had been showing-off internal projects – supposedly resources from the upcoming Sense 6.0 – as a way to demonstrate their creative portfolio to investors”, as reported by Pocketnow.com.

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 It seems that these highly-respected designers and engineers took the external intelligence they gathered to the extreme, and thought they could use that information, in combination with what they knew to be HTC trade secrets to best the company they worked for. The Pocketnow.com website reported that they even went further by “embezzling more than one million dollars, submitting phony expense reports and fraudulent supplier invoices”. They were all arrested and HTC is tight-lipped about what secrets were absconded.

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 In the end, competitive intelligence is very important in the business world. How else would any company be able to be competitive without knowing what their competitors are doing, what external factors of their industry may affect their decisions and how to act upon the information gleaned. Just make sure that ethics are in the fore-front before jumping ship and going the illegal and unethical route.

 

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